Asset Allocation Update We think that US REITs could outperform US equities The recent underperformance of US equity REITs compared with ordinary US equities seems to reflect concerns that the coronavirus could change behaviour in a way that hits the demand for many types of... 16th July 2020 · 6 mins read
Asset Allocation Update Treasuries post GFC & COVID: Spot the differences We continue to expect the 10-year conventional Treasury yield to remain firmly anchored, even as the S&P 500 rises further. This would be a marked contrast to the increase in the yield towards the end... 9th July 2020 · 4 mins read
Asset Allocation Update Negative real TIPS yields a boon for many other assets We suspect that the real yields of US Treasury Inflation Protected Securities (TIPS) will fall a bit further, fuelling renewed gains in risky assets and underpinning gold despite a reduction in safe... 24th June 2020 · 5 mins read
Asset Allocation Update Thinking through the effects of possible second waves The sizes and sources of second waves of COVID-19 are likely to be key factors in determining how much ground, if any, equities cede to government bonds in coming months. While our forecasts allow for... 17th June 2020 · 4 mins read
Asset Allocation Update Low inflation limits downside risks for bonds If we are right that the world faces a period of low inflation over the next few years investors are unlikely to begin anticipating tighter monetary policy and so undermine the returns from government... 5th June 2020 · 5 mins read
Asset Allocation Update Volatility gauges point to more gains in S&P than USTs We anticipate that financial repression will bear down on the renewed low level of volatility of Treasuries, while facilitating a further decline in the level of volatility of US equities. Against... 29th May 2020 · 2 mins read
Asset Allocation Update Equities likely to beat bonds amid financial repression Although US equities still have lot of lost ground to make up on long-dated Treasuries since the outbreak of coronavirus, we think that they will do so over time as the Fed engages in renewed... 22nd May 2020 · 5 mins read
Asset Allocation Update Some surprising factors at work in the US stock market The recent performance of different “factors” in the US stock market may seem surprising during the outbreak of coronavirus, given the adverse implications for the economy of the measures taken to... 12th May 2020 · 3 mins read
Asset Allocation Update Worst-hit EM sovereign $ bonds likely to recover most We expect the returns from EM sovereign dollar bonds to be quite strong over the next few years, as the global economy gradually recovers. With some notable exceptions, we think that the dollar bonds... 5th May 2020 · 4 mins read
Asset Allocation Update US mega caps could be key to UK’s relative fortunes We suspect that the recent underperformance of MSCI’s UK Index relative to its USA Index will peter out when the world starts to get back to normal after coronavirus. 27th April 2020 · 4 mins read
Asset Allocation Update We doubt that gold will continue to outperform While gold has rallied over the past month, we don’t think that it will continue to outperform most other asset classes in the way that it did in the aftermath of the Global Financial Crisis (GFC). On... 22nd April 2020 · 4 mins read
Asset Allocation Update S&P’s outperformance may endure if big remains best The S&P 500’s outperformance of many benchmark indices outside the US since the outbreak of coronavirus may not be surprising, given that it was also a salient feature of much of the previous decade... 17th April 2020 · 3 mins read
Asset Allocation Update Energy commodities unlikely to outperform equities Although energy commodities have substantially underperformed global equities in recent months, we think that the returns from both will be broadly similar over the remainder of 2020 if, as we expect... 8th April 2020 · 4 mins read
Asset Allocation Update Commercial property likely to avoid the rout in REITs Although real estate investment trusts (REITs) were clobbered during the recent market turmoil, their performance over short periods is often comparable to that of equites, which were also hammered... 8th April 2020 · 3 mins read
Asset Allocation Update EM Equities in Latam and EMEA likely to outperform Given how far they have fallen, we think EM equities in Latin America and EMEA will outperform their Asian peers once the coronavirus comes under control, even if the economic fallout in the former... 1st April 2020 · 4 mins read
Asset Allocation Update Will the fire selling of haven assets last? The surprising weakness of Treasuries alongside the collapse in US equity prices recently seems to have been driven by fire selling, not worries about inflation or debt. However, even if further falls... 20th March 2020 · 3 mins read
